Third Quarter IFRS Financial Information

Transcription

1 Third Quarter IFRS Financial Infrmatin Paris, France, Octber 30, 2008 Dassault Systèmes (DS) (Eurnext Paris: #13065, DSY.PA) reprted IFRS unaudited results fr the third quarter and nine mnths ended September 30, 2008 in accrdance with Article L IV f the Mnetary and Financial Cde (Cde Mnétaire et Financier). These results have been reviewed by the Cmpany s Bard f Directrs. Third Quarter 2008 Financial Summary (unaudited) In millins f Eurs IFRS Adjusted Grwth Grwth in cc* Grwth Grwth in cc* Q3 Ttal Revenue % 10% % 10% Q3 Sftware Revenue % 12% % 12% Q3 Operating Incme % % Q3 Net Incme % % * In cnstant currencies. Bernard Charlès, Dassault Systèmes President and Chief Executive Officer, cmmented, Dassault Systèmes sftware revenue grwth f 12% in cnstant currencies during the quarter reflected the increasing mmentum f ur strategy f diversificatin int new industries. Further, we saw particular strength cming frm ur cllabratin and simulatin sftware fferings in bth the PLM and Mainstream 3D markets. Thanks t ur brands and applicatins strategy, the strengthening f ur sales channels, particularly in the mid-market, and grwth in ur custmer base, we were able t deliver third quarter revenue at the high end f ur bjectives ntwithstanding the ecnmic crisis which started t impact ur peratins early September. Based upn ur year-t-date perfrmance and furth quarter utlk, Dassault Systèmes is psitined fr slid grwth in sftware revenue and earnings fr 2008 reflecting the valuable and measurable benefits ur sftware applicatins bring t an increasingly diverse grup f custmers thrughut the wrld. Our gal remains the same t be a strategic partner t all ur custmers, in rder t help them enhance their prducts and prduct innvatin prcesses. In the analysis f its results, DS uses supplemental adjusted IFRS financial infrmatin which is described further at the end f this press release. 1

2 IFRS and adjusted ttal revenue increased 10% in cnstant currencies. By gegraphic regin and in cnstant currencies, ttal IFRS revenue in Eurpe was up 12% (adjusted up 11%), the Americas increased 15% (adjusted up 16%), and Asia increased 1% (adjusted flat) n lwer results in Japan. Revenue grew abve 25% in cnstant currencies in the faster grwing markets cmprised primarily f China, India, Brazil, Eastern Eurpe and Russia. IFRS and adjusted sftware revenue increased 12% in cnstant currencies. Adjusted sftware revenue grwth f 12% reflected adjusted recurring sftware revenue grwth f 18% and new licenses revenue grwth f 1% (all figures in cnstant currencies). Recurring sftware revenue accunted fr 67% f ttal sftware revenue in the quarter. IFRS and adjusted PLM sftware revenue increased 11% in cnstant currencies. On an adjusted basis, ENOVIA sftware revenue increased 19% in cnstant currencies, SIMULIA sftware revenue was up duble-digits in cnstant currencies and CATIA sftware revenue increased 9% in cnstant currencies. Mid-market PLM grwth was healthy reflecting the Cmpany s cntinued prgress in the transfrmatin and expansin f its PLM mid-market sales channel. IFRS Mainstream 3D sftware revenue increased 14% in cnstant currencies. Adjusted Mainstream 3D sftware revenue increased 13% in cnstant currencies n grwth in SlidWrks installed base recurring revenue and sales f SlidWrks design, prduct data management and analysis sftware. DS cnsulting services revenue delivered duble-digit revenue grwth in cnstant currencies. In ttal, Services and ther revenue, representing 13% f ttal revenue, was flat in cnstant currencies during the third quarter, principally reflecting the effect f winding dwn certain histrical channel management activities. New business activity by industry included, amng thers: Cnsumer Packaged Gds: Prcter & Gamble in the Americas; High Tech: Panasnic and Tshiba in Asia; L-3 Cmmunicatins in the Americas; Business Services: TUV Rheinland in Eurpe and American Bureau f Shipping in the Americas; Industrial Machinery: Sany Machine Wrks in Asia and Stara S.A. in the Americas; Autmtive and Aerspace: EDAG and Piaggi Aer in Eurpe. Cash and shrt-term investments ttaled millin and lng-term debt ttaled millin at September 30,

3 Nine Mnths 2008 Financial Summary (unaudited) In millins f Eurs IFRS Adjusted Grwth Grwth in cc* Grwth Grwth in cc* YTD Ttal Revenue % 12% % 11% YTD Sftware Revenue % 15% % 14% YTD Operating Incme % % YTD Net Incme % % * In cnstant currencies. Key Business and Crprate Highlights On Octber 29 th, DS annunced that Prcter & Gamble Cmpany (P&G), the wrld s largest cnsumer gds cmpany, has chsen t implement DS s ENOVIA slutin as its enterprisewide PLM backbne. P&G will leverage Dassault Systèmes prtfli t create a glbal platfrm t supprt prduct develpment. P&G als uses 3DVIA, SIMULIA, DELMIA and SlidWrks slutins frm Dassault Systèmes. In September, DS held its ENOVIA Custmer Cnference fr the Asia Pacific regin in Tky, Japan with mre than 500 f the regin s leading executives attending. Featured custmers included Tshiba in E&E; Nikn in semicnductr; Larsen & Tubr in Pwer, Prcess & Petrleum/Shipbuilding and Pacific Brands in apparel. DS SlidWrks intrduced SlidWrks 2009 which delivers dramatic speed increase plus mre than 260 custmer-driven enhancements. This new sftware release ffers significant perfrmance imprvements, cntinues t fcus n ease f use and is designed t extend the gap between SlidWrks sftware and ther sftware prducts in the 3D Mainstream market. Amng ther enhancements, SlidWrks 2009 includes: SpeedPak, a new apprach t large assembly handling that dramatically reduces the amunt f cmputer memry needed, while maintaining full graphic detail and assciativity; and, Simulatin Advisr, which helps users analyze their designs fr hidden flaws, guiding them thrugh every stage f the simulatin. DS SlidWrks als annunced SlidWrks Enterprise PDM The new versin f the prduct data management slutin intrduces deeper integratin with SlidWrks 3D CAD sftware, expanded bill f material (BOM) functinality, and Item-Centric prduct data management. DS annunced the availability f its PLM prtfli, Versin 5 Release 19, fr its CATIA, DELMIA, SIMULIA, ENOVIA and 3DVIA brands. V5R19 enhancements are fcused n expanding PLM deeper int prductin cycles, accelerating PLM adptin fr mid-size cmpanies, bradening IP lifecycle management and further integrating PLM within the enterprise ecsystem. DS intrduced Isight fr Abaqus, a new prduct frm SIMULIA that leverages technlgy frm recently acquired Engineus Sftware. Isight fr Abaqus is an add-n prduct fr Abaqus FEA sftware that prvides design explratin and ptimizatin technlgy, enabling designers and engineers using Abaqus t perfrm rapid trade-ff studies f real-wrld behavir and accelerate prduct develpment. 3

4 In mid-september, DS annunced 3DVIA Shape 2.0, the latest release f its free 3D mdeling sftware featuring an all new and expanded 3D remix capability, which enables users t cmplete 3D scenes using mdels cntributed by ther users n the 3DVIA.cm cntent library. DS recently annunced the cmpletin f its new green glbal headquarters, Dassault Systèmes Campus, with emplyees mving t the campus starting early Nvember. Dassault Systèmes Campus has earned the French HQE (High Quality Envirnment) label. Other Crprate Infrmatin On Octber 16, 2008, Dassault Systèmes vluntary delisting frm Nasdaq was cmpleted. Dassault Systèmes has filed a Frm 15F with the SEC t deregister and terminate its reprting bligatins under the Exchange Act. The deregistratin will becme effective 90 days after the filing f the Frm 15F. The Cmpany des nt plan t publish a Frm 20-F fr the fiscal year ended December 31, Dassault Systèmes cntinues t maintain its American Depsitry Receipt (ADR) prgram, which will enable investrs t retain their ADRs and facilitate trading n the U.S. Over-The-Cunter (OTC) market. Dassault Systèmes will cntinue t publish its financial reprts, statements and press releases in English as well as infrmatin fr investrs n its website ( pursuant t sectin 12g3-2(b) f the U.S. Securities Exchange Act. The Cmpany intends t cntinue reprting and publishing quarterly unaudited financial infrmatin in U.S.GAAP fr the furth quarter 2008 reprting perid in additin t reprting and filing IFRS quarterly financial infrmatin as required by the French securities regulatin. Starting with fiscal year 2009, DS will slely reprt and publish its financial infrmatin in accrdance with IFRS. Business Outlk The Cmpany s bjectives are prepared and cmmunicated nly n an adjusted basis and are subject t the cautinary statement set frth belw. The Cmpany s bjectives are the fllwing: Furth quarter 2008 adjusted ttal revenue bjective f abut 385 t 395 millin; 2008 adjusted sftware revenue grwth bjective f abut 12% grwth in cnstant currencies frm 12-13%; 2008 adjusted ttal revenue grwth bjective f abut 9% in cnstant currencies frm 9-10%; 2008 adjusted reprted revenue range f abut t billin frm t billin; Objectives based upn exchange rate assumptins fr the 2008 furth quarter f US$1.45 per 1.00 and JPY 145 per 1.00 and 2008 full year exchange rate assumptins f US$1.50 per 1.00 and JPY 157 per 1.00; The adjusted bjectives set frth abve d nt take int accunt deferred revenue write-dwns estimated at apprximately 4 millin fr These estimates d nt include any new acquisitins cmpleted after Octber 29,

5 Frward-lking infrmatin Statements herein that are nt histrical facts but express expectatins r bjectives fr the future, including but nt limited t statements regarding ur adjusted financial perfrmance bjectives, are frward-lking statements (within the meaning f Sectin 21E f the Securities Exchange Act f 1934, as amended). Such frward-lking statements are based n ur management's current views and assumptins and invlve knwn and unknwn risks and uncertainties. Actual results r perfrmances may differ materially frm thse in such statements due t a range f factrs. In preparing such frward-lking statements, we have in particular assumed an average U.S. dllar t eur exchange rate f US$1.45 per 1.00 and an average Japanese yen t eur exchange rate f JPY145 t 1.00 fr the 2008 furth quarter and an average U.S. dllar t eur exchange rate f US$1.50 per 1.00 and an average Japanese yen t eur exchange rate f JPY157 t 1.00 fr the full year 2008; hwever, currency values fluctuate, and ur results f peratins may be significantly affected by changes in exchange rates. We have als assumed that there will be n substantial decline in general levels f crprate spending n infrmatin technlgy althugh we have tried t factr in the ptential impact f the current glbal financial crisis n ur furth quarter bjectives, and that ur increased respnsibility fr bth indirect and direct PLM sales channels, and the resulting cmmercial and management challenges, will nt prevent us frm maintaining grwth in revenues r cause us t incur substantial unanticipated csts and inefficiencies. Our actual results r perfrmance may als be materially negatively affected by the current glbal financial crisis, difficulties r adverse changes affecting ur partners r ur relatinships with ur partners, including ur lngstanding, strategic partner, IBM; new prduct develpments and technlgical changes; errrs r defects in ur prducts; grwth in market share by ur cmpetitrs; and the realizatin f any risks related t the integratin f any newly acquired cmpany and internal rerganizatins. Unfavrable changes in any f the abve r ther factrs described in the Cmpany s AMF reprts, including the Cmpany s 2007 Dcument de référence filed with the French AMF n April 4, 2008, culd materially affect the Cmpany s financial psitin r results f peratins. Supplemental adjusted financial infrmatin Readers are cautined that the supplemental adjusted financial infrmatin presented in this press release is subject t inherent limitatins. It is nt based n any cmprehensive set f accunting rules r principles and shuld nt be cnsidered as a substitute fr IFRS measurements. Als, ur supplemental adjusted financial infrmatin may nt be cmparable t similarly titled adjusted measures used by ther cmpanies. Further specific limitatins fr individual adjusted measures, and the reasns fr presenting adjusted financial infrmatin, are set frth in the Cmpany s Dcument de référence fr the year ended December 31, 2007 filed with the AMF n April 4, 2008 and in the paragraph belw. In additin t the individual adjusted measures described in ur mst recent Dcument de référence, ur unaudited IFRS 2008 quarterly financial infrmatin may reflect ther perating incme and expense, net cmprised f incme and expenses related t the relcatin f the Cmpany s crprate headquarters and restructuring expenses. In ur supplemental adjusted financial infrmatin, we exclude ther perating incme and expense effects because f their infrequent r nn-recurring nature. As a result, we believe that ur supplemental adjusted financial infrmatin helps investrs better understand the current trends in ur perating perfrmance. Hwever, ther perating incme and expense, net are cmpnents f ur incme and expenses fr 2008 and by excluding them the supplemental adjusted financial infrmatin understates the net impact t ur net incme in Other perating incme and expense, net are generally nt recurring, and we d nt expect t incur ther perating incme and expense, net as part f ur nrmal business n a regular basis. 5

6 T cmpensate fr these limitatins, the supplemental adjusted financial infrmatin shuld be read nt in islatin, but nly in cnjunctin with ur cnslidated financial statements prepared in accrdance with IFRS. The tables n pages 8 and 9 f this dcument set frth ur supplemental adjusted revenue, perating incme and net incme, which exclude the effect f adjusting the carrying value f acquired cmpanies deferred revenue, the expenses fr the amrtizatin f acquired intangible assets and stck-based cmpensatin expense (in each case, as explained in ur Dcument de référence), as well as ther perating incme and expense, net (as explained abve). The tables als set frth the mst cmparable IFRS financial measure and a recnciliatin f the IFRS and the supplemental adjusted financial infrmatin. Infrmatin in cnstant currencies When the Cmpany believes it wuld be helpful fr understanding trends in its business, the Cmpany prvides percentage increases r decreases in its revenue (in bth IFRS and n an adjusted basis) t eliminate the effect f changes in currency values, particularly the U.S. dllar and the Japanese yen, relative t the eur. When trend infrmatin is expressed herein "in cnstant currencies", the results f the "current" perid have first been recalculated using the average exchange rates f the cmparable perid in the preceding year, and then cmpared with the results f the cmparable perid in the preceding year. Abut Dassault Systèmes: As a wrld leader in 3D and Prduct Lifecycle Management (PLM) slutins, Dassault Systèmes brings value t mre than 100,000 custmers in 80 cuntries. A pineer in the 3D sftware market since 1981, Dassault Systèmes develps and markets PLM applicatin sftware and services that supprt industrial prcesses and prvide a 3D visin f the entire lifecycle f prducts frm cnceptin t maintenance t recycling. The Dassault Systèmes prtfli cnsists f CATIA fr designing the virtual prduct - SlidWrks fr 3D mechanical design - DELMIA fr virtual prductin - SIMULIA fr virtual testing - ENOVIA fr glbal cllabrative lifecycle management, and 3DVIA fr nline 3D lifelike experiences. Dassault Systèmes shares are listed n Eurnext Paris (#13065, DSY.PA) and Dassault Systèmes ADRs may be traded n the U.S. Over-The- Cunter (OTC) market (DASTY). Fr mre infrmatin, visit CATIA, DELMIA, ENOVIA, SIMULIA, SlidWrks and 3DVIA are registered trademarks f Dassault Systèmes r its subsidiaries in the US and/r ther cuntries. (Tables t fllw) CONTACTS: Dassault Systèmes: Valérie Agathn/Beatrix Martinez

7 DASSAULT SYSTEMES Summary Financial Infrmatin (IFRS) (in millins f Eur, unaudited) Three mnths ended Nine mnths ended In millins f Eurs Sept. 30, Sept. 30, Sept. 30, Sept. 30, New licenses revenue Peridic licenses, maintenance and prduct develpment revenue Sftware revenue Services and ther revenue Ttal Revenue Operating Incme Net Incme IFRS revenue variatin as reprted and in cnstant currencies Three mnths ended Sept. 30, 2008 Nine mnths ended Sept. 30, 2008 Variatin* Variatin in cc** Variatin* Variatin in cc** IFRS Revenue 6% 10% 6% 12% IFRS Revenue by activity Sftware Revenue 8% 12% 9% 15% Services and ther Revenue (3%) 0% (9%) (4%) IFRS Sftware Revenue by prduct line PLM sftware revenue 8% 11% 9% 14% f which CATIA sftware revenue 6% 9% 11% 17% f which ENOVIA sftware revenue 16% 22% 7% 13% Mainstream 3D sftware revenue 9% 14% 9% 13% IFRS Revenue by gegraphy Americas 6% 15% 2% 15% Eurpe 12% 12% 12% 12% Asia (2%) 1% 2% 7% * Variatin cmpared t the same perid in the prir year. ** In cnstant currencies. 7

8 DASSAULT SYSTEMES SUPPPLEMENTAL ADJUSTED FINANCIAL INFORMATION IFRS SUPPLEMENTAL ADJUSTED FINANCIAL INFORMATION RECONCILIATION (in millins f Eur, unaudited) Readers are cautined that the supplemental adjusted infrmatin presented in this press release is subject t inherent limitatins. It is nt based n any cmprehensive set f accunting rules r principles and shuld nt be cnsidered as a substitute fr IFRS measurements. Als, ur supplemental adjusted financial infrmatin may nt be cmparable t similarly titled measures used by ther cmpanies. Further specific limitatins fr individual adjusted measures, and the reasns fr presenting supplemental adjusted financial infrmatin, are set frth in tday s press release with respect t ther perating incme and expense, net and in the Cmpany s 2007 Dcument de référence filed with the AMF n April 4, 2008 fr the ther supplemental adjusted financial measures. T cmpensate fr these limitatins, the supplemental adjusted financial infrmatin shuld be read nt in islatin, but nly in cnjunctin with ur cnslidated financial statements prepared in accrdance with IFRS. Three mnths ended Sept. 30, Variatin In millins f Eurs 2008 Adjustment Adjustment 2007 Adjusted IFRS IFRS (1) Adjusted IFRS (1) Adjusted (2) Ttal Revenue % 6% Ttal Revenue breakdwn by activity Sftware revenue % 8% Services and ther revenue (3%) Ttal Revenue breakdwn by gegraphy Americas % 6% Eurpe % 11% Asia (2%) (2%) Ttal Revenue breakdwn by prduct line PLM revenue % 5% Mainstream 3D revenue % 9% Operating Incme % 12% Net Incme % 26% (1) In the recnciliatin schedule abve, (i) all adjustments t IFRS revenue data reflect the exclusin f the deferred revenue adjustment; (ii) all adjustments t IFRS perating incme data reflect the exclusin f the amrtizatin f acquired intangibles, ther perating incme and expense, net and stck-based cmpensatin expense; and (iii) all adjustments t IFRS net incme data reflect the cmbined effect f these adjustments. (2) The adjusted percentage increase (decrease) cmpares adjusted measures fr the tw different perids. In the event there is an adjustment t the relevant measure fr nly ne f the perids under cmparisn, the adjusted increase (decrease) cmpares the adjusted measure t the relevant IFRS measure. 8

9 DASSAULT SYSTEMES SUPPPLEMENTAL ADJUSTED FINANCIAL INFORMATION IFRS SUPPLEMENTAL ADJUSTED FINANCIAL INFORMATION RECONCILIATION (in millins f Eur, unaudited) Readers are cautined that the supplemental adjusted infrmatin presented in this press release is subject t inherent limitatins. It is nt based n any cmprehensive set f accunting rules r principles and shuld nt be cnsidered as a substitute fr IFRS measurements. Als, ur supplemental adjusted financial infrmatin may nt be cmparable t similarly titled measures used by ther cmpanies. Further specific limitatins fr individual adjusted measures, and the reasns fr presenting supplemental adjusted financial infrmatin, are set frth in tday s press release with respect t ther perating incme and expense, net and in the Cmpany s 2007 Dcument de référence filed with the AMF n April 4, 2008 fr the ther supplemental adjusted financial measures. T cmpensate fr these limitatins, the supplemental adjusted financial infrmatin shuld be read nt in islatin, but nly in cnjunctin with ur cnslidated financial statements prepared in accrdance with IFRS. Nine mnths ended Sept. 30, Variatin In millins f Eurs 2008 Adjustment Adjustment 2007 Adjusted IFRS IFRS (1) Adjusted IFRS (1) Adjusted (2) Ttal Revenue % 5% Ttal Revenue breakdwn by activity Sftware revenue % 8% Services and ther revenue (9%) Ttal Revenue breakdwn by gegraphy Americas % 1% Eurpe % 11% Asia % 1% Ttal Revenue breakdwn by prduct line PLM revenue % 5% Mainstream 3D revenue % 7% Operating Incme % 11% Net Incme % 14% (1) In the recnciliatin schedule abve, (i) all adjustments t IFRS revenue data reflect the exclusin f the deferred revenue adjustment; (ii) all adjustments t IFRS perating incme data reflect the exclusin f the amrtizatin f acquired intangibles, ther perating incme and expense, net, and stck-based cmpensatin expense; and (iii) all adjustments t IFRS net incme data reflect the cmbined effect f these adjustments. (2) The adjusted percentage increase (decrease) cmpares adjusted measures fr the tw different perids. In the event there is an adjustment t the relevant measure fr nly ne f the perids under cmparisn, the adjusted increase (decrease) cmpares the adjusted measure t the relevant IFRS measure. 9